What does level term insurance mean? How is it beneficial?

LTA (level term insurance) is an insurance policy that provides a specified sum assured (the amount of money your beneficiaries will receive upon your death) if you die within a defined period (the term). The word level is used because the sum assured remains the same. The word term refers to the set length of time.

A level term insurance policy is there to provide financial security should the worst happen during your working life (with a start and an end date). During this time, you are financially responsible for significant outgoings – mortgage payments, supporting your children into their adulthood, credit card and loan debts, car finance and more. Leaving your family without a sizable sum after you pass away could make a huge impact on their lives, adding a huge extra worry on top of the depth of grief they are feeling. The premium for level term policies are calculated based on two main factors; your age and your health. Factors such as being overweight and smoking have a significant impact on the cost of your monthly premium, and when looking at the average life insurance cost, you need to factor your health and lifestyle into account before estimating your cover. This is why it is advised to opt for life insurance as soon as you can.

Level term insurance helps your beneficiaries upon your death but does not offer any support should you become severely injured or critically ill before that time. Critical illness cover is an additional policy that provides insurance for you should you suffer a life-changing situation that puts you permanently out of work.

By taking out a combined life insurance and critical illness policy, you will make a saving on your premiums.

Will your level term policy be worth it to your children?

It’s a fact that, without taking inflation into account, what seems like a huge sum of money today might be little more than the deposit on a broom closet in 30 years. It is possible to index-link your life insurance policy, tying it to the consumer price index (CPI) and making sure the sum assured rises with inflation. This will mean that your premiums are also tied to the CPI and will grow each year alongside, but the result is usually more than worthwhile.

We would recommend you to talk to one of our advisers for life insurance quotes.
Any quote that your adviser provides you with will take into account your circumstances, your medical history, as well as your budget!
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